Most companies begin cutting costs at the “discretionary” level. Initially the cost cutting typically starts with expenditures like travel, office expenses, trade shows, advertising, hiring freezes and other “non essential items.” Trade-offs are made between departments, staff, and programs. Some companies use these trying times to cut staff they should have pared long ago but “feel” that a layoff is a more gentler method of personnel reduction than termination.
Industry leaders like G.E. and Dell continuously rank their staff and push the bottom 10% out annually. While the percentage rule may be draconian and harsh, in well run companies there is constant recruiting and upgrading personnel. If you have appropriately addressed legacy personnel, whom may have been placed in sales or marketing, you now have the team you will be moving forward with or are recruiting to get there.
A common misconception in many companies, in general and especially difficult economic climates, is that sales staff can sell with no marketing, including resources, lead generation, training, support, advertising, Public Relations, product positioning, etc. The assumption is that the brand can “coast” for a while and that sales staff can generate their own leads, work harder and smarter, and work more.
I personally have never seen this work. While there may be some initial flurry of activity and results, the results quickly fade as sales pipelines dry up and your best most qualified staff, members leave, get burned out or are recruited away.
Sales staff needs to be selling, maintaining relationships, and prospecting as they always should to continue an appropriate sales pipeline. If marketing was generating and qualifying leads, introducing new products, carrying the company flag, and supporting sales any reduction directly impacts the sales process, pipeline and personnel.
Revenue which will be impacted by the economic slowdown will fall further due to reduced sales opportunities. The cycle will further spiral down as sales are instructed to get sales, at reduced rates and margins, due to the panic epidemic overcoming the organization.
I read recently about a major retailers closing of a number of stores. In the process a consulting group took over the sales to wind down the locations. In doing so, they advertised the closures, made signs, retained sales staff with retention bonuses, and continued to market. In the end their margins and revenues were higher than stores remaining open in competitive markets.
For smaller companies, especially private ones, competing against large public or investment group owned companies now may be the time to gain market share. Customer service, competitive prices, alternative products and value may be what customers are looking for. The large companies have probably already cut the “discretionary” staff members in sales and customer support to “make their numbers.”
You may have better value, customer and product support and pricing, but your prospects and competitor’s customers will never know, at least on a large scale, without marketing to them. There are only so many calls a sales person can make to get the message to prospective clients.
The message may be different, it could be the same, but it needs to be delivered.